Cousins Properties Incorporated 2006 Annual Report - SNL Financial

Company and 28% to GDL, after each partner received a 10% preferred return on their investment. On June 30,
2005, the Company entered into a business combination with several entities, collectively called “The Gellerstedt
Group.” On that date, the Company began consolidating its investment in 905 Juniper, which was previously
accounted for on the equity method, and GDL’s interest was recorded as a minority interest. Therefore, results of
operations of 905 Juniper in the accompanying table only reflect the period that the Company accounted for the
venture on the equity method. Results of operations after consolidation were recorded in the multi-family
residential unit sales and multi-family residential unit costs of sales line items, with GDL’s share of operations
recorded as minority interest, in the accompanying Consolidated Statement of Income. GDL is an entity affiliated
with Lawrence L. Gellerstedt III, the Company’s Senior Vice President and President of the Office/Multi-Family
Division.
Other — This category consists of several other joint ventures including:
Deerfield Towne Venture, LLC (“Deerfield”) — Deerfield is a joint venture between Casto Realty of
Southern Ohio LLC, Anderson Deerfield, LLC and the Company that developed and sold a shopping center
near Cincinnati, Ohio. The Company has a 10% profits interest in Deerfield and made no capital contributions
nor has any obligations to fund the entity. Deerfield sold the shopping center in 2005, and the Company
received cash distributions in 2005 and 2006.
Verde Group, L.L.C. (“Verde”) — The Company invested $10 million, which represented less than 5% of
equity at December 31, 2006, in Verde, a real estate development company. Verde issued additional equity
subsequent to the Company’s investment at a higher price than the Company’s per unit ownership. As a result,
the Company recognized a gain, net of tax, which was recorded in additional paid-in capital. This gain was
calculated according to provisions as outlined in SAB No. 51 for newly-formed, start-up or development-stage
entities. Prior to 2006, the Company accounted for its investment in Verde under the equity method, and Verde
was included in the “other” row in the above tables. In the third quarter of 2006, the Company began
accounting for Verde on the cost method and therefore transferred its basis in Verde from investment in joint
ventures to other assets.
Additional Information — The Company recognized $9.3 million, $9.3 million, and $13.0 million of development,
leasing, and management fees from unconsolidated joint ventures in 2006, 2005 and 2004, respectively.
See Note 2, Fee Income, for a discussion of the accounting treatment for fees from unconsolidated joint ventures.
7. STOCKHOLDERS’ INVESTMENT
Preferred Stock:
COUSINS PROPERTIES INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company has 4 million shares outstanding of 7.75% Series A Cumulative Redeemable Preferred Stock
(liquidation preference of $25 per share). The Company also has 4 million shares outstanding of 7.50% Series B
Cumulative Redeemable Preferred Stock (liquidation preference of $25 per share). The Series A preferred stock
may be redeemed on or after July 24, 2008 and the Series B preferred stock may be redeemed on or after
December 17, 2009, both at the Company’s option at $25 per share plus all accrued and unpaid dividends through
the date of redemption. Dividends on both the Series A and Series B preferred stock are payable quarterly in arrears
on February 15, May 15, August 15 and November 15.
1999 Incentive Stock Plan:
The Company maintains the 1999 Incentive Stock Plan (the “1999 Plan”), which allows the Company to issue
awards of stock options, stock grants or stock appreciation rights. As of December 31, 2006, 508,745 shares were
authorized to be awarded pursuant to the 1999 Plan, which allows awards of stock options, stock grants or stock
appreciation rights. The Company also maintains the 1995 Stock Incentive Plan, the Stock Plan for Outside
Directors and the Stock Appreciation Rights Plan (collectively, the “Predecessor Plans”) under which stock awards
have been issued.
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